India’s smartphone sales face a festive squeeze, but market value rises 5%

The smartphone market in India is estimated to see a 12% dip in sales volumes this festive season, even as the overall market value is projected to grow 5% as higher memory costs push up device prices and consumers delay upgrades, according to Counterpoint Research, as reported by TOI.

The divergence points to a shift towards costlier smartphones, with sales increasingly driven by existing users replacing their devices rather than first-time buyers.

Also Read: Budget smartphones under Rs 10,000 may disappear amid rising memory costs


Financing options, exchange offers and buyback programmes are expected to play a bigger role in supporting demand as manufacturers face limited room for deep discounts.

“The key challenge this festive season will be the size of the active consumer pool,” Tarun Pathak, research director at Counterpoint Research, said in the report.

Higher prices are likely to keep consumers on the sidelines, with discretionary upgrades deferred and purchases driven largely by replacement needs, he added.

The shift is also visible in the growing role of device trade-ins. Servify, which handles more than 3 lakh device trade-ins annually, said volumes in October and November are typically around 50% higher than in regular months.

“This festive season is shaping up as an upgrade season more than a first-purchase season,” Sreevathsa Prabhakar, Servify’s founder and chief executive, told TOI.

Upgrades in the Rs 60,000-1 lakh segment are being driven largely by financing and trade-ins, Prabhakar said, adding that the demand for devices priced above Rs 1 lakh, including foldable phones, is primarily coming from existing premium users who upgrade every 12-24 months.

The trend is also spreading beyond metros to tier-2 and tier-3 cities, indicating that premiumisation is reaching smaller markets.

Servify said premium smartphones have protection-plan attachment rates 30-40% higher than mid-range devices, with coverage increasingly bundled with financing and upgrade offers.

Also Read: India smartphone prices jump 16% in first half of 2026; market seen shrinking double digits

Rising memory costs have added to pricing pressure.

The Economic Times reported earlier this year that smartphone volumes in the sub-Rs 10,000 segment were expected to fall 20% in 2026, according to Counterpoint.

Higher component costs have pushed brands to raise prices and reduce their presence in the budget segment.

With affordability under pressure, attractive exchange values, easy financing and assured buybacks are likely to be key to festive smartphone sales.